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  Accounting Ratios Indicators that measure profitability, liquidity, and potential financial distress in a company’s financials Home  ›  Resources  ›  Knowledge  ›  Accounting  ›  Accounting Ratios What are Accounting Ratios? Accounting ratios cover a wide array of ratios that are used by accountants and act as different indicators that measure profitability,  liquidity , and potential financial distress in a company’s financials. The ratios are used by accountants and financial professionals to communicate and investigate problems or successes within a designated time period.                 Often, accounting ratios are calculated yearly or quarterly, and different ratios are more important to different industries. For example, the inventory turnover ratio would be significantly important to a retailer but with almost no significance to a boutique advisory firm. The fi...